Year: 2020

HRM stands for Human Resource Management, and human resource management strategies are the plans that lead to implementing different functions in the human resources department of an organization. Typically, these strategies are guided by the overall strategies of the business and serve to help the business attain its long-term goals via its staff. These strategies can be divided into four key areas:

1. Talent and Human Capital

Talent represents the human capital of an organization and is crucial to the success of that business. It is an important asset that the business should strive to maintain. How does the human resources management system help with these? By having a comprehensive staffing blueprint. The human resources department should forecast the staffing needs of the business in the future while also recruiting, hiring, and keeping the best talent in the organization. The most successful businesses in the world pride themselves in hiring the best talent in the world.

In order to do this effectively, the HRM department needs to identify the various competencies required for each job, such as the skills, abilities, and knowledge required to perform various tasks effectively. This will allow them to draw detailed job descriptions that will ultimately guide them to find the best people for the job.

2. Leadership of an Organization

The leadership of the organization is likened to what the head is to a body. It is through leadership that a business succeeds or fails in its endeavors. The HRM department plays a key role in the leadership of the organization because it is tasked with finding the best executives to steer the business in the right direction.

An HRM department that can boast past success in choosing the right executives will generally find it easier to convince the board of its recruits the next time an executive is required. In order to do this job effectively, HR managers need to be active in an advisory capacity when engaging with other organizational leaders so as to give their input on what is best for the company’s future.

3. Human Resources Planning

The HRM department plays an important role in helping the business to plan for the future. Take employees, for example: by conducting regular surveys of the employees to determine employee satisfaction, the HRM department can give important insights to business leaders on what needs to be done in the future to contribute to a happier workplace.

4. Performance Metrics and Corporate Culture

An organization with well-defined performance metrics is an organization with high potential for success. The HRM department plays a role in this, as well. Through developing well-defined performance metrics, regular performance evaluations, and schemes to reward employees for high performance and creativity in accomplishing their tasks, the HRM department will create a high-performance culture where the interests of the employees are aligned with those of the business, and they are genuinely motivated to do their best. Employees who feel appreciated by their companies and receive recognition for their achievements in the workplace are likely to want to do more.

As a result of the scarcity of qualified managers which can lead to constraints on global office expansion for businesses, an effective global human resources strategy can be vital in building and securing a sustainable advantage over their competition. Good HR management requires an integrated approach, which begins to merge into career management. A cohesive network will ensure that the right people are in the right jobs, and that all costs are attributed appropriately. This can ultimately allow the business to identify good ideas on a global scale. Ultimately, the building of this network comes down to an effective global human resources strategy, and here, we’re taking a look at the ten steps businesses can take to ensure this is in place.

1. Ending favouritism

One of the fundamental steps towards building a global human resources strategy should be to end favouritism towards managers that are nationals of the country in which they are based. Whilst many companies consider nationals of their headquarters country as potential expatriates and refer to everyone else as ‘local nationals’, this should be reconsidered for numerous reasons. Ethnocentric companies put the most confidence in nationals of their headquarters’ country, and thus this is the reason why these nationals receive the better assignments and climb the ladder much faster. Most surprisingly, big contrasts can be found between expatriate and local national pay, including the bonuses and benefits they receive. In order to create an effective global human resources strategy, businesses must weigh up the advantages and disadvantages of using expatriates and local nationals to determine the best solution according to the desired outcome.

2. Identify activities that achieve success

The next step towards an effective global human resources strategy is identifying activities that best achieve success across the globe and identify the positions that held responsibility for ensuring their success. The positions that hold the responsibility for performing these good acts represent the ‘lifeline’ of a company. Once the activities that achieve success have been identified, businesses can then revisit the lifeline and role descriptions on a regular basis to ensure they accurately represent the business strategy.

3. Finding who & where your talent is

Once a company has identified the activities that achieve success, they can find who and where their talent is via a global database, focusing on more than just the top of the organization and considering middle managers in the country markets and potential stars leaping through the ranks. Organizations seeking to build a useful global human resources database must start with an array of personal-profile templates that ask questions that go beyond each manager’s experience to determine cultural ties, language skills, hobbies and interests. For overseas assignments, especially, Human Resources Directors must consider these skills and adaptability to be as important as functional skills if not more so!

4. The mobility pyramid

Another way for businesses to build an effective global human resources strategy is by constructing a mobility pyramid to easily evaluate managers regarding their willingness to move to a new location to gain experience. Whilst many human resources departments refuse to look at mobility beyond ‘movable’ and ‘not movable’, it is paramount that there is more behind the decision to transfer an employee abroad should they need to relocate, and even more so because managers can move up or down the mobility pyramid at various stages during their career. By constructing a mobility pyramid, businesses can find different ways to effectively use available in-house talent and encourage an increased number of managers to consider saying yes to an overseas assignment.

5. Leadership capital

The next step businesses need to take to create an effective global human resources strategy is to identify their leadership capital. One of the best ways for businesses to identify their leadership capital is by building a database of their company’s mix of managerial skills by requiring people to provide more information on their CV’s regarding their experience in management and skills they possess. This way, HR departments can kick-start the process by holding senior meetings and those in lifeline posts to complete the form first, prior to adding others from across the globe with the potential to progress in their career.

6. Bench strength & skills gap

The following step businesses must take towards an effective global human resources strategy is to assess their bench strength and skills gap. To do this, businesses must ask each executive to compare their skills and characteristics against the requirements identified for the executive’s current position. Not only is this an effective way to compare skills with ease, but it can also help close personal skills gaps through in-house training or by participating in outside courses to heighten global success.

7. Regular recruitment

In order to construct an effective global human resources strategy, businesses must search for new recruits on a regular basis in the local market, as well as in the headquarters’ country. Whilst this can be challenging from time to time, one of the best ways to attract national recruits is by demonstrating how far they can climb up within the organization, as this is one of the most appealing aspects job seekers look for. Recruitment and selection not only helps to ensure that the business has the necessary knowledge and skills required to fulfill objectives, but it also forms part of the strategic management of human resources.

8. Advertising internally

As mentioned previously, regular recruitment is a great way to attract new talent, but when a business advertises their posts internally, it allows a competitive internal job market to work across nationalities and genders alike, and proves to employees that they can in fact broaden their horizon and make a future in the company. Moreover, advertising internally helps attract those that may be in the process of finding an alternative job, and thus reduces employee retention and creates a positive work environment.

9. Succession planning

In regard to regular recruitment in order to construct an effective global human resources strategy, managers in a lifeline role should nominate at least three candidates who could take over that position in the upcoming week, three months down the line or within the next year. Whilst this will not resolve all succession questions, it will certainly go a long way and significantly help everyone involved to identify potential future leaders with ease. Moreover, succession planning provides businesses with the bigger picture and is paramount to sustain income and support expenses should a disaster occur.

10. Challenging & retaining talent

Lastly, another step to an effective global human resources strategy is to challenge employees in order to retain talent. The need to retain talented employees is increasing every day, and for good reason. Retention of talent is crucial for the continued growth and success of any business, which is why is it paramount that colleagues are provided with consistent and regular communication about what needs to be done, and feedback to ensure the business moves with the market. One of the most effective ways to retain talent is by being open to employees about their potential and future within the future, paying well and not pondering over promoting people who have shown rock-solid ability.

Businesses often struggle to construct an effective global human resources strategy because they are unaware of what an effective global human resources strategy should include, but with these ten steps, businesses can create a beneficial global human resources strategy with ease and confidence.

An efficiently run human resources department can provide your organization with structure and the ability to meet business needs through managing your company’s most valuable resources its employees. There are several HR disciplines, but HR practitioners in each discipline may perform more than one of the more than six essential functions. In small businesses without a dedicated HR department, it’s possible to achieve the same level of efficiency and workforce management through outsourcing HR functions or joining a professional employer organization.

The six main function of HR are recruitment, workplace safety, employee relations, compensation planning, labor law compliance and training.

1. Recruiting the Right People for the Right Job

The success of recruiters and employment specialists generally is measured by the number of positions they fill and the time it takes to fill those positions. Recruiters who work in-house as opposed to companies that provide recruiting and staffing services play a key role in developing the employer’s workforce. They advertise job postings, source candidates, screen applicants, conduct preliminary interviews and coordinate hiring efforts with managers responsible for making the final selection of candidates.

2. Maintaining a Safe Environment

Workplace safety is an important factor. Under the Occupational Safety and Health Act of 1970, employers have an obligation to provide a safe working environment for employees. One of the main functions of HR is to support workplace safety training and maintain federally mandated logs for workplace injury and fatality reporting. In addition, HR safety and risk specialists often work closely with HR benefits specialists to manage the company’s workers compensation issues.

3. Employer-Employee Relations

In a unionized work environment, the employee and labor relations functions of HR may be combined and handled by one specialist or be entirely separate functions managed by two HR specialists with specific expertise in each area. Employee relations is the HR discipline concerned with strengthening the employer-employee relationship through measuring job satisfaction, employee engagement and resolving workplace conflict. Labor relations functions may include developing management response to union organizing campaigns, negotiating collective bargaining agreements and rendering interpretations of labor union contract issues.

4. Compensation and Benefits

Like employee and labor relations, the compensation and benefits functions of HR often can be handled by one HR specialist with dual expertise. On the compensation side, the HR functions include setting compensation structures and evaluating competitive pay practices. A comp and benefits specialist also may negotiate group health coverage rates with insurers and coordinate activities with the retirement savings fund administrator. Payroll can be a component of the compensation and benefits section of HR; however, in many cases, employers outsource such administrative functions as payroll.

5. Labor Law Compliance

Compliance with labor and employment laws is a critical HR function. Noncompliance can result in workplace complaints based on unfair employment practices, unsafe working conditions and general dissatisfaction with working conditions that can affect productivity and ultimately, profitability. HR staff must be aware of federal and state employment laws such as Title VII of the Civil Rights Act, the Fair Labor Standards Act, the National Labor Relations Act and many other rules and regulations.

6. Training and Development

Employers must provide employees with the tools necessary for their success which, in many cases, means giving new employees extensive orientation training to help them transition into a new organizational culture. Many HR departments also provide leadership training and professional development. Leadership training may be required of newly hired and promoted supervisors and managers on topics such as performance management and how to handle employee relations matters at the department level.

Professional development opportunities are for employees looking for promotional opportunities or employees who want to achieve personal goals such as finishing a college degree. Programs such as tuition assistance and tuition reimbursement programs often are within the purview of the HR training and development area.

Performance appraisal is a process that needs to be undertaken meticulously if obtaining desirable results is anything to go by. Many managers conduct this kind of evaluation on their employees from time to time majorly because it is an organizational tradition or requirement but not necessarily because of its impact on the future.

However, there are those who do it for a purpose but in some instances tend to face a myriad of challenges along the process. There are various problems with performance appraisal that managers often face. These problems include;

Some of the Problems with Performance Appraisal

1. Compare/contrast error

When appraising employees, it is important never to compare their abilities and using it to make a judgment.

Each employee is gifted in their unique way and thus has different strengths and weaknesses. When you try to compare or contrast their abilities, it means that you will not get a fair review because high performers will certainly make relatively low performers for particular tasks to look below average, which on some occasions is never the case.

Of essence is to ensure that you appraise every worker by their performance against established standards and criteria, individually.

2. Similarity error

In every organization, some employees have a resemblance of different aspects with the manager. Now some managers usually find it easy to reward such employees highly compared to those who portray contrasting behaviour or opinion.

As a manager, it would be significant to ensure that you perform your employee appraisal objectively and considering that diversity should be respected, try to carry out the appraisal process based on performance and results that they provide and not primarily by similarity/dissimilarity that you have.

3. Bias

Bias is also one of the problems with performance appraisal managers often encounter. As a matter of fact, everyone has some biases towards someone or something irrespective of how we portray them. However, as a manager, it is imperative not to let the biases hinder the manner in which you approach performance evaluation process.

Your biases can manipulate the objectivity of appraisal hence it is important to ensure that you keep it off as much as possible to make sure that you do not compromise the results of your findings. Biases may also lead to inconsistencies among different employees bearing in mind that the key element for attaining best results from appraisal is consistency.

If you do not like someone it will not be right to use that feeling in making review judgment, it is unprofessional.

4. Stereotyping

Stereotyping is closely related to biases only that in this case, you tend to make your judgment by your predetermined mindset towards a particular employee’s race, gender, political affiliation, religious background, culture and other characteristics.

Stereotyping is problematic when assessing employees’ performance because it implies that you will only be able to provide judgment based on what you label the group similar to one that the particular employee belongs to.

What you need to know is that stereotyping can also be positive or negative and thus can significantly influence your judgment respectively. It is only ideal to look beyond the labels and evaluate the employee by set standards and performance.

5. The Halo effect

This is also known as the horns effect. It is a situation where you let your positive or negative feelings towards an employee to influence your evaluation easily. It is necessary to judge each criterion independently without compromising what you feel for the employee.

You should also be careful when doing appraisal evaluations so that in the event you realize that most criterions are coming out with similar appraisals, you should halt and check yourself for the halo effect. It is a fact that each employee will always portray certain areas as their weakness and others as their strengths.  What you need to do is to ensure that you do not colour the entire evaluation with a particular impression

6. Recency effect

This is majorly about carrying out an appraisal for a short period before it takes place. As stated earlier, an appraisal is an activity that takes place continuously, which means that the focus should not only be for the short period before it happens but rather the entire time of the year.

In many organizations, problems with performance appraisal usually arise when a manager decides to determine results by basing their evaluation on what an employee has achieved just before the assessment. In this case, it sounds unfair to employees who have been outstanding throughout but later faulted few days to assessment and vice versa because the appraisal will not be able to reveal the actual reality.

7. Attribution error

This is one of the trickiest problems with performance appraisal. It involves making your independent belief on possible causes of some behaviours or outcome and letting that influence your judgment.

It is never a good idea to develop an assumption of what transpired or made the employee behave in the manner that he or she did and later use it as a basis for reviewing the appraisal process. It is only essential if you stick by the stipulated standards and criterion and how the performance of each employee compares to such standards. It only becomes a fair when the employee is judged on their performance in line with the set standards rather than preconceived notion.

8. Leniency and Severity tendencies

These mistakes usually arise as a result of distribution errors, which imply that the overall dissemination of appraisal does not stand firm to the classic bell. This means that some managers are too lenient and will end up appraising all employees above average, others will give average whereas others would provide below average.

In the typical occasion, the results need to reflect the classic bell curve where some employees are graded as high performers; others average while other poor performers. But in the unlikely event that all appraisal results come out as similar, you need to ensure that entire performance measures are given sufficient consideration. It helps in a great way of making sure that fair appraisal has been carried out.

Definition: Key result areas or KRAs refer to the general metrics or parameters which the organization has fixed for a specific role.

Key Result Area can be understood as the fundamental areas of the outcome, for which a department is accountable. It is the strategic factor, implicit or explicit to the firm, from where favourable outcomes can be attained, to reach the final goal and take a step ahead towards the organization’s vision.

In human resource management, KRA implies the metrics set by the organization for a specific role. Therefore, it highlights the scope of the job profile. It helps the employees in understanding the role and responsibilities, in a better way. So, it needed to be clearly determined and quantified, so that the employee can line up their role with that of the aim of the firm.

Description: Key result areas (KRAs) broadly define the job profile for the employee and enable them to have better clarity of their role. KRAs should be well-defined, quantifiable, and easy to measure. It also helps employees to align their role with that of the organization.

KRAs are broad categories or topics on which the employee has to concentrate during the year. For example, an employee who is working at a managerial level in a manufacturing company would have a different KRA than somebody who is in a technology firm.

A manager who is working in a manufacturing firm would have to focus on maintaining the budget of the department, safety of the employees, coordination with different departments, training, reporting as well as introducing new technologies to improve productivity.

The next step is to define objectives and standards for each KRA which should be easily quantifiable. The employee should have a clear understanding of his/her KRAs to perform his/her tasks efficiently.

Key result areas are those areas in which you have to take complete ownership. The first step is to list out daily activities which could be part of the KRAs. In some organization even a team meeting everyday is part of a manager’s KRA.

So, KRAs could be vary from organization to organization and from one work profile to another. There are no set rules to define KRAs, but broadly they sum up the job profile as well as the key impact areas on which the employee is expected to deliver.

Definition of KPI

Key Performance Indicator, as the name signifies, is the financial and non-financial metric used by the firms to gauge and fortify the success, towards the goals of the organization. After the ascertainment of the organization’s mission, identification of stakeholders and determination of goals, the progress towards the goal is evaluated through key performance indicator.

The key performance indicator is used at different levels by an enterprise to track the progress of the firm in the realization of targets. It plays the role of a compass that helps in understanding whether the company has chosen the right way to reach the final aim or not.

Different types of organization have different performance indicators, such as the KPI of a business entity can be income percent. Likewise, the pass out rates of the students is the key performance indicator of a school. Therefore, it can be anything like profit, cost, turnover, consumer satisfaction, customer base, customer attrition, employee turnover ratio, employee satisfaction and so forth.

Key Differences  between KPI and KRA

The points given below are substantial, so far as the difference between KPI and KRA is concerned:

1. Key Result Area can be described as the essential areas of business that requires excellent performance to obtain the favourable result, to survive and grow in the industry. On the other hand, Key Performance Indicator, or otherwise called as KPI is a performance metric, used by the organization to ascertain how effectively the firm is performing.
2. Key result area is a strategic business unit, wherein great efforts are needed to achieve success. As against, the key performance indicator is a metric that gauges the level to which business goals are achieved.
3. KPI is a quantifiable measure, meaning that it gauges the performance of a product, service or the business unit in the market, in quantitative terms. On the contrary, KRA is qualitative in nature, in the sense that it determines the areas that can help in attaining high value for the organization.
4. The key result area is used to find out the scope of a particular product or unit. In contrast, key performance indicator measures the success of the organization towards goals at various levels.

By and large, the business entities work continuously for the achievement its mission. However, it is difficult to ascertain that how far the business has worked towards the realization of goals. Key Performance Indicator acts as a tool to determine the achievement of an objective, while KRAs are those areas that require a high level of performance to gain a competitive position in the market.

In a perfect world, employees would arrive at work each day with bright smiles on their faces, eager to be productive and engaged with their colleagues. But, the sad truth is that a vast number of employees are either disengaged or on their way out of the organization. According to Gallup Poll, nearly 66 percent of all employees are disengaged, leaving only about one-third of the workforce actively participating in their jobs at full production. This averages out to hundreds of billions of dollars a year in lost production.

Employees Become Disengaged

The reasons for employee disengagement vary from one workplace to another, but most of the time it stems from:

• Poor working conditions or jobs that place too much strain on employees’ physical and mental well-being
• Low salaries and limited employee benefit programs that don’t offer much in terms of compensation
• The inability to provide meaningful tasks, rewarding projects or upward mobility in careers
• Long-term problems with poor management practices and other negative corporate culture norms

Incentives and Benefits for Engagement

Fortunately, employers can use targeted incentives and benefits to vastly improve employee happiness and engagement in most workplaces. Along with programs to reduce tension and poor management practices, incentives and benefits can be used to boost employee morale and engagement at work. A Towers and Watson report advises that companies should place their focus on sustainable engagement in order to see the best results over the long term. The three critical elements of sustainable engagement include:

• Engagement: Determining how committed employees are to the company and creating measures to increase the intensity levels of individuals to see the connection between their actions and the company objectives.
• Enablement: Creating the opportunity for employees to work up to their full capacity while experiencing the appreciation of management, even if there are limits on budgets and human resources.
• Energy: Developing a corporate culture where employee well-being is promoted and practiced on a regular basis. Building programs for reducing stress and improving work-life balance.

Therefore, when a company wants to develop more employee engagement, they must first start by examining the above elements and making positive changes at the operations management level. Only then can incentives and benefits alter employee performance and happiness.

Some examples of employee benefits and incentives that can positively impact the organization, and employee engagement, include the following:

Paid and Unpaid Time Off

Everyone can benefit from taking a little time off once in a while. Organizations that want to support a happier workforce understand this, therefore they provide flexible time off policies that add to the overall work-life balance. Want to take it up a notch? Provide travel discounts, working vacations and group day outings to allow employees to blow off steam.

Company Ownership and Profit Sharing

When employees can experience the rewards of business profitability, this can be a powerful incentive for them to hustle at work. Therefore, adding a company stock ownership or profit sharing program can be a big benefit.

Retirement Savings Plans

With thousands of Baby Boomers leaving the workforce daily, the need for strong retirement savings plans is high on the list of priorities for many employees. This is also true for those who are in their 30s and 40s, as they will be busy earning as much money as possible to boost retirement plans. Companies can set up an automatic retirement savings plan and match 50 cents on every dollar that employees contribute to help boost retirement savings.

Training and Development

The learning and professional development market has exploded since the evolution of online and remote classes. In addition, there are still many working adults who are reinventing themselves as a result of the recession which took away many jobs. Having a program that provides on-the-job training at no cost to employees can be a major boost to employee engagement and productivity. Make sure that there are many ways for employees to learn both on and off the job, such as support for college tuition, industry certifications and community events.

Flexible Scheduling, Remote Work Arrangements

There are millions of adults working from home at least a few days a week. Even those who work full time on business campuses are less likely to sit at desks all day because of the use of mobile technology. A workplace that creates mobile-friendly work options, such as telecommuting, holding meetings offsite and offering flexible work hours can be a great way to improve employee productivity and happiness.

Mentorship and Advanced Skill Building

A company that wants to inspire its workforce understands the need to transfer skills and knowledge from one generation to the next. Create a legacy learning and coaching program that matches seasoned leaders up with mid-level employees who will be ready to take that next step in their careers. Mentors can boost morale and they can also give the business an edge by deepening the core values that the company has developed. Set up mentorship meet-and-greet programs often.

Wellness Benefits and Programs

Employers are continually recognizing how critical the wellness and mind connection is for employees. When employees are healthy, they are happier and can work up to their full abilities. Wellness programs can be rolled out for a small investment and can include simple programs such as on-site nutritional support, walking programs and health fairs.

Improved Working Environment

Today’s employees are looking for the entire package when it comes to their work experience. They are no longer willing to work in stifling cubicle farms with no windows or anything pleasant to look at. Companies that take the time to improve the work environment with soft seating arrangements, collaborative workstations, pleasant artwork, lighting and live plants are going to find that this translates to happier employees. Making some changes in the workplace can help a company see an almost immediate boost in employee mood.

Financial Wellness Benefits

An overwhelming amount of debt stemming from credit cards, student loans, housing costs and more weigh on many employees. Many people just don’t know how to manage the money they earn. A company that invests in the financial education and well-being of its workforce can help employees to experience the freedom of getting out of debt and living within their means.

Company Celebrations and Events

Along with being connected to the profitability and success of a business, employees often look forward to celebrations. And why not celebrate their hard work and contributions? Have at least an annual celebration that includes all employees, including those that are family friendly. For example, there could be a week-long celebration with a fun theme, so employees can dress up for a costume contest, decorate their workspaces or participate in a chili cook-off.

Employee Surveys and Brainstorming Sessions

The greatest perk you can give your employees is the chance to have a voice. Employee engagement surveys, pulse surveys, and brainstorming sessions allow employees to speak up in an environment where they can feel safe and validated. Use a third party employee survey firm to handle the details and keep things confidential. Hold brief staff meetings with participants asking them to come up with workplace improvement ideas.

Special Spotlight Projects and Community Causes

Many employees enjoy the chance to gain professional and personal recognition for a project of their choosing. These can be community-based projects or initiatives that are industry related and promote the company in a positive light. Find out what causes employees are participating in and how the company can get behind them. Introduce the concept of employee social journalism into the day to day activities of the company to create culture and engagement.

The above perks and benefits can be excellent incentives to get employees excited about their work again. Set up bonus and recognition programs to foster employee well-being even more. A little can go a long way, with the right effort from the company.